To yuenwah

I'm very sorry about this very late reply. As you know, I was away for more than 2 months towards the end of 2007. There are still some comments left on this blog that I have not managed to attend to. These days some ad-robots keep posting junks and rubbish links to the comments section. If the problem continues, I will have no choice but to disable commenting completely.

My views:

• Agricultural still has a long way to go, with various setbacks along the way, of course.
• Gold and Silver will continue to go higher, and Silver will outperform Gold in 2008. That's why I added Silver last Friday (see Silver).
• I think is a good time to buy Coffee, based on the last closing price on Friday. Anything below that last closing is a bargain in my view.
• Apart from Agricultural, I am also very bullish on the Energy complex.
• As with your question about ratio, I think that's a very personal choice. To me is more about buying at attractive prices with very low risk -- that's when I will do it at a very big scale. Currently, my biggest holdings are in Precious Metals and FX. However, I am going to increase my holdings in Energy very, very soon.
• Futures might sound scary to some people, but when you know what you are doing there's very low risk.

My concerns:

• China is a bubble. All bubbles pop eventually.
• Will Asia and Emerging Economies decouple from the US both in terms of Manufacturing and Financials?
• The US is the biggest customer of China. When the US is in a recession and with a shrinking US trade deficit, what does that say about China and Emerging Economies? The US trade deficit has been one of the main sources of money financing China and Emerging Economies.
• There are 3 things and 3 things only in a modern economy: Money Flow, Currency, and Interest Rate. A government can control 2 out of 3, but surely not 3 out of 3. Amid the subprime crisis, the only thing central banks can do is to print more paper money! These new money is unlikely to flow to where they want, i.e. US Financials; they are more likely to be pushed into the current winners, i.e. Gold, Silver, Soft Commodities, Energy, etc.
• As with China, can it really still grow at more than 10% a year with record high commodity and energy prices? The Bank of China has increased rates for many times, consecutively. And China will need a strong Yuan to curb its domestic inflation.
• The Stimulus Package announced by the US is ridiculous. What they are giving out is essentially one month worth of mortgage payment for US homeowners -- that's peanut compared to the scale of the problem they are facing! Also, you can never solve a credit problem by the use of more short-term debt/government creating money out of thin air and giving it away. What the US needs is a recession. The more they try to fight a market correction, which is normal and healthy in reality, the more difficulties down the road.